Axalta Coating Systems has announced its financial results for the second quarter ended June 30, 2017.
Net sales of $1,088.5 million for the second quarter of 2017 increased 2.3 percent, including 1.5 percent in unfavorable foreign currency translation impact. Constant currency net sales increased 3.8 percent in the period, driven by 6.5 percent in acquisition contribution, partly offset by 0.3 percent lower volumes and 2.4 percent lower average selling prices. Slightly lower organic net sales were driven by impacts in Latin America, North America and EMEA, while Asia Pacific continued to show growth.
Net loss attributable to Axalta was $20.8 million for the second quarter of 2017 compared with net income attributable to Axalta of $50.7 million in the second quarter of 2016. The decrease was primarily driven by losses resulting from the deconsolidation of Axalta’s Venezuelan operations as well as financing charges related to the company’s term loan refinancing during the quarter. Adjusted net income of $75.4 million for the second quarter of 2017 decreased from $83.7 million in the second quarter of 2016.
Adjusted EBITDA of $227.2 million for the second quarter compared with $251.1 million in the second quarter of 2016. This result was led by the impact of lower average pricing, and also included slightly lower volume driven by Latin America and EMEA, modest variable cost pressure and negative foreign currency translation. These factors were offset in part by savings from our operating improvement initiatives.
“Axalta continued to grow the business overall in the second quarter with net sales up 3.8 percent on a constant currency basis, including closing several notable acquisitions and posting organic growth in key areas of the business as planned,” said Charles Shaver, Axalta’s chairman CEO. “Both the industrial and commercial vehicle end-markets saw solid mid-single digit organic growth through new account penetration and recovering underlying demand in key regions. Still, our overall net sales and adjusted EBITDA results were impacted by softness this quarter, particularly in April, due to a mix of specific customer demand, some light vehicle pricing concessions and uneven demand by region in several of our end-markets,” said Shaver.
“We have assessed our performance and believe Axalta remains on sound footing to achieve our longer-term strategic and financial goals in spite of some shortfalls in the period, and we are making adjustments with the objective of better performance in the remainder of 2017,” he said. “Key steps are being taken moving forward to implement price increases to offset key input inflation and accelerate cost actions to help deliver our revised 2017 profit outlook.
“We are encouraged that the broader demand outlook remains stable across our businesses. We see supportive end-market conditions in Refinish, stable overall automotive production for Light Vehicle in spite of some expected pullback in North America this year, and recovering conditions across Commercial Vehicle markets. Our focus remains squarely on managing our customer exposure and adding new accounts, working to offset cost inflation pressures while executing on Axalta Way productivity, and continuing to integrate our recently closed acquisitions. We believe we are set up to show stronger performance from the combination of these efforts in the second half of the year,” said Shaver.
